Search

Schroder Real Estate Investment Trust

"Our focus on Winning Cities in the UK offers a competitive advantage in terms of higher levels of GDP, employment and population growth to deliver long-term sustainable income and capital growth."

Our trusts
Introduction
Portfolio
Strategy
Sustainability
Investors

Key facts about SREIT’S portfolio as at August 2022, including post period end industrial portfolio acquisition

SREIT delivered outperformance of the IPD MSCI Benchmark Index over the past quarter

1.4%

SREIT delivered outperformance of the IPD MSCI Benchmark Index over past 12 months

3.5%

SREIT delivered outperformance of the IPD MSCI Benchmark Index over past 3 years

2.8% p.a.

SREIT has delivered outperformance of the IPD MSCI Benchmark Index since IPO in July 2004

1.3% p.a.

NAV total return for the quarter to 30 June 2022 2021

5.4%

NAV total return for the year to 31 March 2022

30.9%

Number of properties

422

Portfolio value

£550million2

Deals completed since 31 March 2022

22deals

Annual rent of deals completed since 31 March 2022

£3.2million

Net loan to Value (LTV)4

29%2

GRESB Results 2021

3Green Stars
Source: Schroders, March 2021
1A monthly property performance index which tracks retail, office and industrial properties. The index includes data on actual property transactions from institutional investors and property companies.
2This includes post-period end industrial portfolio acquisitions.
3 These winning cities are likely to change over time.
4This measures the relationship between the loan amount and the market value of the asset securing the loan

Discrete yearly performance (%)

Discrete yearly performance (%) 12 months to Jun-2022 12 months to Jun-2021 12 months to Jun-2020 12 months to Jun-2019 12 months to Jun-2018
Share Price1 12.7 70.7 -42.8 -6.9 0.4
SREIT NAV Total Returns2 31.2 0.0 -13.1 2.9 10.8
SREIT Real Estate Total Returns3 23.8 11.0 -1.1 5.7 11.9
MSCI Balanced Monthly and Quarterly Index funds3 19.6 7.1 -2.3 3.7 9.7
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
Schroder Real Estate Investment Trust – Risk Considerations:
Investments in real estate are relatively illiquid and more difficult to realise than equities or bonds. Yields may vary and are not guaranteed. The use of gearing is likely to lead to volatility in the Net Asset Value (‘NAV’) meaning that a relatively small movement either down or up in the value of the Company’s total assets will result in a magnified movement in the same direction of that NAV. There is no guarantee that the market price of shares in Investment Companies such as SREIT will fully reflect their underlying NAV. The value of real estate is a matter of a valuer’s opinion rather than fact.
The trust may be concentrated in a limited number of geographic regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the funds.
The Company may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the assets purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.
Source: 1Schroders, Datastream, bid to bid price with net income reinvested in GBP. 2The Company completed the refinancing of its £129.6 million loan with Canada Life in October 2019. This extended the average maturity from 8.5 to 16.5 years and reduced the interest rate from 4.4% to 2.5% per annum. The refinancing generated an immediate interest saving of £2.5 million per annum. The refinancing incurred a one-off cost of £27.4 million. 3MSCI Balanced Monthly and Quarterly Index funds (including indirect investments on a like-for-like basis).

Learn more about our assets in through these virtual tours:

Top 10 holdings:

Benefits of a multi-sector approach

Diversified portfolio offering significant asset management potential

# Property Sector Value (£m) % of total portfolio value
1 Milton Keynes, Stacey Bushes Ind Est Industrial 67.3 12.2
2 Leeds, Millshaw Park Industrial Estate Industrial 58.0 10.6
3 London, Bloomsbury, University of Law Campus (50% share) Office 42.5 7.7
4 Manchester, City Tower (25% share) Mixed use office 40.7 7.4
5 Bedford, St. John's Retail Park Retail warehouse 35.5 6.5
6 Chippenham, Langley Park Industrial Estate Industrial 27.8 5.1
7 Cheadle, Stanley Green Trading Estate Industrial 26.3 4.8
8 Norwich, Union Park Industrial Estate Industrial 26.0 4.7
9 Leeds, Headingley Central Mixed use retail 23.8 4.3
10 Telford, Horton Park Industrial Park Industrial 15.2 2.8
11 Manchester, St. Ann’s House Mixed use office 14.7 2.7
12 Uxbridge, 106 Oxford Road Office 14.3 2.6
13 Birkenhead, Valley Park Industrial Estate Industrial 14.0 2.5
14 Edinburgh, The Tun Office 12.0 2.2
15 Salisbury, Churchill Way Retail warehouse 11.2 2.0
  Sub-total top 15 properties   429.3 78.1
Notes: Portfolio data as at 30 June 2022.

Sector weightings

sector image

Industrial (47.6%)1

The Company owns a range of industrial warehouses, the largest being multi-let estates in the densely populated urban areas of Leeds, Manchester and Milton Keynes which are positively impacted by structural trends and where there are significant asset management opportunities to capture rental growth.

sector image

Retail Warehouse (11.6%)1

The retail assets in the portfolio are predominantly well managed, bulky goods retail warehouses let at sustainable rents.

sector image

Other (6.1%)1

Other sectors are hotels and leisure properties. At present, the apportioned value of the hotels at City Tower, Manchester and Headingley Central, Leeds and a leisure scheme in Luton represent the Other weighting in the portfolio.

sector image

Office (27.5%)1

The Company owns offices with good fundamentals in terms of specification and location in those Winning Cities and Regions that are attractive to a diverse occupier base. The largest office investments are in London (Bloomsbury and Uxbridge), Manchester and Edinburgh.

sector image

Retail (7.2%)1

Of which 4.8% has retail as part of mixed use assets and 3.6% has retail as sole use The retail assets in the portfolio are convenience retail as part of mixed-use assets which are complementary to broader schemes and have multiple uses such as offices and hotels. The Company does not own any shopping centres.

Source: Schroders, June 2022. Percentage of total real estate portfolio value.
1This includes post-period end industrial portfolio acquisitions.
University of Law

The University of Law, London

Description: The University of Law campus is an 85,814 sq ft freehold office and educational campus comprising 0.8 acres over four properties.

Asset strategy: To improve the office accommodation to take advantage of healthy levels of occupational demand and reposition the retail and leisure offer.

  • Joint venture:50% share
  • Sector:Office
University of Law

The University of Law, London

Valuation: As at 30 September 2020, the asset was valued at £37.7 million reflecting a net initial income yield of 3.6% and a reversionary yield of 4.7%.

Description: The University of Law campus is an 85,814 sq ft freehold office and educational campus comprising 0.8 acres over four properties. The site density is low at 68% with significant redevelopment potential. The single tenant asset is leased to the University of Law to December 2026 with five yearly upward-only rent reviews to the higher of RPI or open market value.

Asset strategy: The strategy for 2020 was to continue dialogue with the University of Law to settle the outstanding rent review from December 2019 and explore a re-gear or surrender on part or whole, alongside continued dialogue with adjoining ownerships for wider site assembly.

Key activity:

  • Rent review with the University of Law completed post period end and the terms of the review are as follows:
    • New rent of £1,850,000 per annum or £42.12 per sq ft, which compares favourably with the prior rent of £1,434,500 per annum or £32.66 per sq ft. This delivers an annualised rental increase of £415,500 or 29%.
    • The Company will receive £326,708 of back rent due to the rent review being dated 17 December 2019 and, as part of the settlement, the tenant has received a three month rent free period.
    • The new rent reflects a yield of 4.9% based on the independent valuation as at 30 September 2020.
  • The asset is located in an increasingly desirable area which will benefit from the new Crossrail station at Tottenham Court Station and infrastructure improvements relating to Camden Council’s ‘West End Project’, including highway improvement measures to Tottenham Court Road and Gower Street, as well as a new pocket park at nearby Alfred Place. Combined with proximity to Kings Cross and the University of Central London (‘UCL’), this has led to increasing tenant demand in Bloomsbury and underpins future redevelopment value.
  • Acquisition date:June 2014
  • Joint venture:50% share
  • Sector:Office
Bedford

St John’s Retail Park, Bedford

Description: 130,000 sq ft retail warehouse park 1.5 miles from Bedford town centre.

Asset strategy: To improve retailer mix and to negotiate new longer leases in order to preserve the rental income and manage void risk.

  • Sector:Retail
Bedford

St John’s Retail Park, Bedford (Retail Warehouse)

Valuation: As at 30 September 2020, the asset was valued at £27.0 million reflecting a net initial income yield of 5.2% and a reversionary yield of 6.8%.

Description: St. John's Retail Park comprises a 130,000 sq ft retail warehouse park 1.5 miles from the town centre.

Asset strategy: The strategy for 2020 was to improve retailer mix and to negotiate new longer leases in order to preserve the rental income and manage void risk.

Key activity:

  • Lidl and Home Bargains opened in October 2020 and early indications are that this will have a significant positive impact on the scheme through increased footfall, attracting new occupiers and the retention of existing occupiers.
  • Asset management activity delivered over period to 30 September 2020 includes completion of landlord works and new leases completed with Lidl and Home Bargains, a new 10 year letting to Easy Bathrooms at £22.00 per sq ft and a re-gear with Curry's PC World for ten years term certain
  • Future asset management includes letting vacant units where we have already seen strong interest, supported by the recent footfall improvements due to the Lidl and Home Bargains openings.
  • Acquisition date:May 2015
  • Sector:Retail
Leeds

Millshaw Industrial Estate, Leeds

Description: 463,400 sq ft multi-let industrial estate in a prominent location comprising 27 units strategically located south of Leeds city centre close to the M62 and M621 motorways.

Asset strategy: The strategy for 2020 was to refurbish units to drive a higher rental income return, explore the potential for change of use over the longer term and acquire adjoining interests. This has continued to be a top performing asset with many active management examples.

  • Sector:Industrial
Leeds

Millshaw Industrial Estate, Leeds

Valuation: : As at 30 September 2020, the asset was valued at £35.9 million reflecting a net initial income yield of 5.0% and a reversionary yield of 6.3%.

Description: 463,400 sq ft multi-let industrial estate in a prominent location comprising 27 units strategically located south of Leeds city centre close to the M62 and M621 motorways.

Asset strategy: The strategy for 2020 was to refurbish units to drive a higher rental income return, explore the potential for change of use over the longer term and acquire adjoining interests. This has continued to be a top performing asset with many active management examples.

Key activity:

  • 6 new lettings, rent reviews and renewals completed during the period totalling £0.6 million in annualised rental income and generating an additional £130,000 per annum of rent above the previous level. These included:

    • Lease completed on Unit 18 to Leeds South and East Foodbank at £31,500 per annum (£6.97 per sq ft).
    • Lease completed on Unit 8 with CitySprint on Unit 8 for 10 years with a tenant only break in the 5th year at £90,000 per annum (£6.00 per sq ft).
  • Working with the adjoining owner of the White Rose Office Park to promote a new station to service the location
  • Acquisition date:July 2015
  • Sector:Industrial
Edinburgh

The Tun, Edinburgh

Description: Multi-let office building in Edinburgh city centre, located close to the Royal Mile and Scottish Parliament.

Asset strategy: To capitalise on low supply in the Edinburgh office market and improve rents through new lettings, re-gears and rent reviews.

  • Sector:Office
Edinburgh

The Tun, Edinburgh

Valuation: As at 30 September 2020, the asset was valued at £11.1 million reflecting a net initial income yield of 4.3% and a reversionary yield of 6.7%.

Description: The Tun is a multi-let office building in Edinburgh city centre, located close to the Royal Mile and Scottish Parliament.

Asset strategy: To capitalise on low supply in the Edinburgh office market and improve rents through new lettings, re-gears and rent reviews.

Asset strategy: The strategy for 2020 was to capitalise on low supply in the Edinburgh office market and improve rents through new lettings, re-gears and rent reviews..

Key activity:

  • Re-gear completed with the British Broadcasting Corporation (‘BBC’), the largest tenant at the Tun. The transaction extended the term by five years from October 2021. The lease includes a fixed increase in 2021 from the passing rent of £195,500 to £225,000 per annum. In return the BBC receives six months rent free and the Company will complete improvement works at a cost of £675,000.
  • Re-gear completed with the General Medical Council. The transaction extended the expiry from September 2021 to September 2026 with a break option in 2024. The passing rent increases from £55,000 per annum (£20.00 per sq ft) to £74,816 per annum or £27.50 per sq ft (valuation ERV £27.50 per sq ft) in September 2021 when the tenant will receive 3 months rent free.
  • Rent review completed with the World Wildlife Fund was agreed at £52,400 per annum, reflecting a 44% increase on the prior rent.
  • Rent review completed with the Edinburgh University Press was agreed at £67,900 per annum, a 30% increase on the prior rent.
  • Acquisition date:August 2018
  • Sector:Office

What are the risks?

Investments in real estate are relatively illiquid and more difficult to realise than equities or bonds.

Yields may vary and are not guaranteed.

The use of gearing is likely to lead to volatility in the Net Asset Value ("NAV") meaning that a relatively small movement either down or up in the value of the Company's total assets will result in a magnified movement in the same direction of that NAV.

There is no guarantee that the market price of shares in a UK Real Estate Investment Trust such as SREIT will fully reflect their underlying NAV.

The value of real estate is a matter of a valuer's opinion rather than fact.

This UK Real Estate Investment Trust should be considered only as part of a balanced portfolio, of which it should not form a disproportionate part.

Getting started

Investment trusts offer a flexible and effective way to gain exposure to some of the world's most dynamic markets and regions, and can be used to meet a variety of investment outcomes. For more information on how Schroder Real Estate Investment Trust shares can be bought and sold, visit our How to invest page.

Visit page

Contact Schroders

Schroders is a world-class asset manager operating from 38 locations across Europe, the Americas, Asia, the Middle East and Africa.




Worldwide locations

For any further questions, please contact us. 

Contact us

Our Business Development team is available to discuss with you any investment options and opportunities you might be interested in. 

Your contacts

Please remember that the value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

This marketing material is for professional clients only. This site is not suitable for retail clients.

Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England.

Schroder Unit Trusts Limited is an authorised corporate director, authorised unit trust manager and an ISA plan manager, and is authorised and regulated by the Financial Conduct Authority.

On 17 September 2018 our remaining dual priced funds converted to single pricing and a list of the funds affected can be found in our Changes to Funds. To view historic dual prices from the launch date to 14 September 2018 click on Historic prices

© Copyright 2022 Schroders plc